NRG Buys Installer Roof Diagnostics in Rooftop Solar Push

NRG Energy Inc. (NRG), the largest independent U.S. electricity producer, bought rooftop solar installer Roof Diagnostics Solar Inc. as it seeks to capitalize on the growing decentralized power market.

Roof Diagnostics will be re-branded as part of NRG’s existing solar installation unit, Princeton, New Jersey-based NRG said in a statement today. Terms weren’t disclosed. The 475-employee company headquartered in Wall Township, New Jersey will complement and be rolled into NRG’s existing rooftop unit NRG Residential Solar Solutions that mainly consists of licensed dealers.

Self-generation using solar panels is becoming competitive with the retail price of power in many states, reaching half of all states by next year, NRG Chief Executive Officer David Crane said yesterday in an interview. He outlined plans to accelerate NRG’s shift into a more distributed generation model and the purchase of companies such as Roof Diagnostics.

The shift fits into Crane’s vision that the U.S. energy industry is in the midst of a profound transformation. Producing electricity on residential rooftops is upending the century-old model that relied on utilities to deliver power from large generating plants. Instead, NRG is planning for a network that uses many, smaller generating sites located close to where electricity is consumed.

“People thought I was crazy,” Crane said, about his prediction last year that these distributed power plants are making the grid increasingly unnecessary. “Now, almost everyone accepts that it is going to happen.”

NRG already owns large solar farms that sell energy to utilities, and commercial sites that generate power for businesses. It also delivers electricity to about 3 million customers through its retail businesses. Moving into the residential solar market offers the chance to boost sales to consumers. “The most valuable customers for us are the home energy customers,” where margins are higher, Crane said.

Crane detailed his vision of the evolving energy industry in an annual letter to shareholders yesterday. A system that relies on building more large solar projects and wind farms in remote sites would be “an expensive and pointless white elephant,” he said.

NRG foresees “a prolonged period through which the traditional centralized grid-based power system co-exists with the fast-emerging high-growth distributed generation sector,” Crane wrote. “We are doing everything in our power to head in that direction.”

Copyright 2014 Bloomberg

Lead image: Man during intallation of photovoltaic solar panels on roof, via Shutterstock

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